Question #125
Reading: Reading 22 Market-Based Valuation - Price and Enterprise Value Multiples
PDF File: Reading 22 Market-Based Valuation - Price and Enterprise Value Multiples.pdf
Page: 45
Status: Unattempted
Part of Context Group: Q125-127
First in Group
Shared Context
Question
Using the cash flow statement approach calculate the aggregate accruals ratio:
Answer Choices:
A. 11.5%
B. 5.7%
C. 10.2%
Explanation
Aggregate accruals = NI – CFO – CFI
Aggregate accruals = $357 – $607 + 550 = $300
Accruals ratio = $300 / ($2,760 + $2,480) / 2 = 11.5%
2010
2009
Total assets
5,190 4,670
Cash and investments
(150)
(100)
Operating assets
5,040 4,570
Total liabilities
3,250 2,990
Notes payable
(200)
(220)
Long term debt
(770)
(680)
Operating liabilities
2,280 2,090
Net operating assets
2,760 2,480